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Pentagon Targets Overhead Spending

Jun. 2, 2013 - 01:53PM   |  
By MARCUS WEISGERBER   |   Comments
This picture taken 26 December 2011 show
Defense Secretary Chuck Hagel has ordered his undersecretaries to find excess and waste within the Department of Defense as part of his quest to reduce overhead. (AFP via Getty Images)
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WASHINGTON — US Defense Secretary Chuck Hagel wants to trim the fat across the Defense Department, and he’s starting with his office at the Pentagon.

Hagel has ordered his undersecretaries to find excess and waste within the office, part of his quest to reduce overhead.

“He’s asked all of his senior assistants to say: What could we stop doing, or what could we do less of?” Pentagon Comptroller Robert Hale said in a May 2 interview. “It is a challenge to figure that out because much of what we do is either frankly to support him or Congress.”

But Hagel believes more can be done. A little over a month on the job, he essentially declared war on overhead during an April 3 speech at National Defense University.

“[I]t is still not clear that every option has been exercised or considered to pare back the world’s largest back-office,” he said. “Prior efficiency campaigns yielded substantial savings from the services, and some from the DoD elements known as the ‘Fourth Estate,’ which consists, as you all know, of the Office of the Secretary of Defense [OSD], the Joint Staff, the combatant commands and the defense agencies and field activities — the Missile Defense Agency, as well as those that provide health care, intelligence and contracting support.

“We need to relook at funding for these activities, which won’t be easy,” Hagel said.

Hale called Hagel’s tasking to find overhead within OSD “a healthy exercise to challenge ourselves to say what could we do less of, or are there ways we could be more efficient.”

Last week, Deputy Defense Secretary Ashton Carter said there are “real savings to be realized” in these areas.

“The Fourth Estate represents a fifth of the department’s budget, and it merits at least as much scrutiny as the military services’ budgets,” Carter said during a May 7 speech at the National Press Club.

DoD field agencies and combat support agencies must receive “the same level of scrutiny” the services are receiving as the Pentagon budget contracts, Carter said. Headquarters sizes also will be scaled back.

“I believe that we need to shrink those headquarters functions also at least as much as everything else is shrinking,” he said.

Specific areas to cut are being explored in the Strategic Choices and Management Review — led by Carter — that is looking at a range of areas to cut in DoD depending on the level of spending reductions legislated. The Pentagon must cut $37 billion from its budget in 2013 due to sequestration.

Despite troop reductions already in place, support functions, which ballooned over the two wars of the past decade, have remained, according to defense analysts.

The exact amount DoD spends on overhead is up for debate. Some experts peg spending on “back-office” functions at as much as 40 percent of the Pentagon budget.

Hale calls that estimate “nonsense.”

“That 40 percent figure, which has been around a long time, is really an infrastructure cost,” he said. “Simplistically, it’s everything that doesn’t deploy or fight.”

That estimate includes research and development, command and control, and training, Hale said.

“When I think of overhead, I think of comptrollers and back-office kinds of functions, not the training establishment and research and command and control.”

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